As tax cuts go, they are pretty enticing: lifting the burden of stamp duty from first-time buyers and removing 98 per cent of family homes from the threat of inheritance tax.

But economists and political opponents were quick to question the sums behind an ingenious election sweetener announced today by George Osborne, the Shadow Chancellor, to raise a levy on foreign millionaires living tax-free in the UK to pay for those proposed cuts

According to the Tories' own calculations, released in a briefing note at the party conference in Blackpool, such a levy could raise at least £3.5 billion, exactly meeting the funding gap created by the abolition of stamp duty on properties under £250,000 and the new £1 million inheritance tax threshold.

The Conservative policy is based on 150,000 people being asked to pay the annual £25,000 'offshore domicile levy' in return for guaranteed non-dom status, which allows them not to pay tax on their earnings abroad. That would raise a gross £3.75 billion, reduced to £3.5 on the assumption that around 20,000 people would decide to pay UK tax instead.

In fact, the Tory briefing note describes that as "a cautious estimate". The last official figure for the number of non-doms dates back to 2004/05, when there were 112,000. The Conservatives reckon that there are now more than 200,000, maybe as many as 230,000, earning on average significantly more than £100,000 a year.

One advantage of the scheme, for those who will be asked to cough up, is that it should give legal certainty to a sector of the population long denied it. Gordon Brown promised to review the non-dom scheme back in 1994, even before taking office, but has never taken any action,

"Meanwhile, the tax burden on the vast majority of UK-domiciled families has risen to its highest ever peacetime level and millions more people have been dragged into income tax, stamp duty and inheritance tax," the Conservative briefing note said.

"Setting the levy at around £25,000 strikes the right balance between ensuring that all UK residents pay their fair share towards our public services and maintaining the competitiveness of the UK as a location for high net worth individuals."

One thing that the scheme appears to have in its favour is that wealthy Americans, who are thought to comprise about half of the non-doms, could offset the levy against their US tax bills, effectively forcing the US Treasury to foot half the bill for the stamp duty and inheritance tax reforms.

Among those experts questioning the wisdom of Mr Osborne's scheme was Andrew Tailby-Faulkes, tax partner at Ernst & Young, who warned the Conservatives that imposing the levy would have an adverse affect on the UK economy and the City's global competitiveness.

He said: “Any changes to the non-domiciled tax regime should be carefully thought through before imposing a flat penalty on individuals. These changes could hit the City hard and have an adverse economic impact on the UK.

“Britain benefits significantly from the businesses, jobs and wealth that these people generate. Their willingness to work and invest here helps boost London’s competitive edge against other global financial centres. That could easily be jeopardised.”

There was also a note of caution from the CBI, whose director-general, Richard Lambert, was quick to point out the contribution of non-doms to the British economy.

“While the sums mentioned by Mr Osborne may be small for these people, we do need to be wary of driving jobs and opportunities away from the UK,” he said.

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